http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111903167_2.html
Angry Congress lashes out at Obama
ECONOMIC WOES TAKING A TOLL
House Republicans call on Geithner to resign
By Brady Dennis, Zachary A. Goldfarb and Neil Irwin
Washington Post Staff Writer
Friday, November 20, 2009
Growing discontent over the economy and frustration with efforts
to speed its recovery boiled over Thursday on Capitol Hill in a
wave of criticism and outright anger directed at the Obama
administration.
Episodes in both houses of Congress exposed the raw nerves of
lawmakers flooded with stories of unemployment and economic
hardship back home. They also underscored the stiff headwinds that
the administration faces as it pushes to enact sweeping changes to
the financial regulatory system while also trying to create jobs
for ordinary Americans.
President Obama's allies in the Congressional Black Caucus,
exasperated by the administration's handling of the economy,
unexpectedly blocked one his top priorities, using a legislative
maneuver to postpone the approval of financial reform legislation
by a key House committee.
Two buildings away, at a session of the Joint Economic Committee,
Republicans escalated their attacks on Treasury Secretary Timothy
F. Geithner, including a call for his resignation.
"Conservatives agree that as point person, you failed. Liberals
are growing in that consensus as well," said Rep. Kevin Brady
(R-Tex.). "For the sake of our jobs, will you step down from your
post?"
Rep. Michael C. Burgess (R-Tex.) took a different tack. "I don't
think that you should be fired," he told Geithner. "I thought you
should have never been hired."
Even Sen. Charles E. Schumer (D-N.Y.), a friend of the
administration, suggested that Geithner had been inconsistent in
addressing China's practice of keeping its currency low against
the dollar.
And Rep. Peter DeFazio (D-Ore.) said Wednesday on MSNBC that he
thinks Geithner should step down, pointing to his handling of the
aftermath of American International Group's meltdown.
Across Capitol Hill, senators signaled their opposition to rushing
regulatory reform. While some Democrats voiced reservations about
parts of the bill, Republicans went further, faulting Sen.
Christopher J. Dodd (D-Conn.) for pushing ahead before the roots
of the crisis were understood.
Perhaps most troubling for the administration was that one of the
few measures to succeed Thursday was an amendment by Rep. Ron Paul
(R-Tex.) that would subject the Federal Reserve to unprecedented
scrutiny. The amendment, which won bipartisan support in the House
Financial Services Committee despite the reservations of
administration officials, would allow the Government
Accountability Office to audit all of the Fed's operations,
including its decisions on interest rates and its transactions
with foreign central banks.
Paul and allies in both parties -- more than 300 members of
Congress have endorsed the measure -- are looking to increase
oversight of an institution they consider partly to blame for the
financial crisis. Federal officials and many private economists
worry that the amendment could make future central bank
policymakers reluctant to take unpopular steps to prevent
inflation or support the economy for fear of second-guessing by
Congress and government auditors.
The House committee had been set to vote to send the final piece
of its regulatory reform package to the House floor after months
of debate. That is, until the committee's chairman, Rep. Barney
Frank (D-Mass.), told a shocked committee room that passage of the
bill would be delayed until Dec. 1 because the Congressional Black
Caucus wanted the administration to do more to help African
American communities suffering in the economic decline.
Frank told committee members that black lawmakers were "frustrated
by the response to the economic situation by the administration."
He said the caucus had no issues with the legislation itself.
"They want obviously to continue to have some bargaining power
with the administration," he said after the hearing.
The caucus itself did not publicly detail its concerns Thursday,
but one member, Rep. Maxine Waters (D-Calif.), issued a statement:
"The recession has created a unique systemic risk that threatens
all parts of the African-American community, including the poor
and the middle class."
The caucus began discussing its concerns with Frank and the
administration several weeks ago. Frank hosted a meeting Monday
night between caucus members, Geithner and White House Chief of
Staff Rahm Emanuel.
"You're talking about people whose constituents have been badly
hammered by this," Frank said. "Given the nature of this
recession, there needs to be some more conversations."
Frank said the caucus had concerns about whether minorities were
being fairly represented in helping carry out Treasury's bailout
programs and other federal efforts to resolve the financial
crisis. The government has contracted out much of the work to Wall
Street firms.
Congressional aides said the caucus's concerns are similar to
those of the Democratic Party's liberal wing. Caucus members are
pushing for legislation that would directly lead to new jobs by
providing tax benefits, for example, that would provide incentives
for home renovations and funding for new infrastructure projects.
They also want to extend health-care and unemployment benefits.
Meanwhile, Geithner was taking a beating as he urged Congress to
pass regulatory reform as quickly as possible, arguing that delay
would create uncertainty for businesses across the country.
Lawmakers sharply criticized him for his role in the crisis during
the tense Joint Economic Committee meeting. They were particularly
critical of his involvement in the decision, as president of the
New York Fed, to bail out AIG.
But Geithner pressed forward: "To ensure the vitality, the
strength and the stability of our economy going forward, we must
bring our system of financial regulation into the 21st century.
Nobody in my job should ever be in the position again of having to
come into a crisis like this without those basic authorities."
Dodd, chairman of the Senate Banking Committee, chose the marbled
Caucus Room in the Russell Senate Office Building -- site of past
hearings on Watergate, Pearl Harbor and the Wall Street abuses
during the Great Depression -- to open debate on a massive draft
bill designed to achieve the most ambitious reworking of the
financial system in decades.
"This is one of those moments in our nation's history that compels
us to be bold," Dodd said.
But soon, ranking committee Republican Richard C. Shelby (Ala.)
took the floor, and for 18 uninterrupted minutes he opined that
nearly every element of Dodd's bill was misinformed, uninformed,
unnecessarily rushed or just plain flawed. "This committee has not
done the necessary work to even begin discussing changes of this
magnitude. Nevertheless, you have laid a bill before the
committee," Shelby said. "I will be opposing this legislation. Not
because we disagree on its ends, but rather on its means."
Shelby said Dodd was wrong not to conduct an investigation into
the causes of the recent financial crisis before pushing forward
with legislation. He said rather than ending the problem of
institutions that are "too big to fail," the current bill expands
the government's ability to bail out big banks. Shelby apologized
for the length of his critique, expressed his hope that the two
men might "yet find some common ground," and yielded the floor.
"Well," Dodd said in the morning's only moment of levity, "I thank
you for the endorsement."
Staff writer David Cho contributed to this report.